Bridging the Weeks - April 2018

Two broker-dealers’ purported failure to act on red flags – both involving customer trading – resulted in separate Securities and Exchange Commission enforcement actions against the firms. In connection with one action, two former anti-money laundering compliance officers were also sued for their roles in their firm’s alleged failure, as was the firm’s chief executive officer. Unrelatedly, the SEC asked for public comment on NYSE Arca, Inc.’s proposed rule change to list and trade shares of exchange-traded funds based on bitcoin futures contracts. As a result, the following matters are covered in this week’s edition of Bridging the Week:

Broker-Dealer, CEO and AML Compliance Officer Settle SEC Charges for Not Filing Suspicious Activity Reports in Response to Red Flags: Aegis Capital Corporation, a Securities and Exchange Commission-registered broker-dealer, agreed to resolve separate charges brought by the Commission and the Financial Industry Regulatory Authority that, from at least January 2012 through April 2014, it failed to file suspicious activity reports with the Financial Crimes Enforcement Network of the United States Department of Treasury, as required, in connection with transactions that potentially involved market manipulation of low-priced securities.

The firm settled its SEC matter by agreeing to pay a fine of US $750,000 and committing to certain undertakings, including instituting recommendations made by a compliance consultant. Aegis settled its parallel charges by FINRA by agreeing to pay a fine of US $550,000.

Contemporaneously, Robert Eide, Aegis’s ultimate 100-percent owner and chief executive officer, and Kevin McKenna, the firm’s anti-money laundering compliance officer from June 2012 through June 2013, also agreed to resolve SEC charges related to Aegis’s SEC enforcement action. Mr. Eide agreed to pay a fine of US $40,000 while Mr. McKenna consented to pay a penalty of US $20,000 and not serve as a compliance officer or an AML compliance officer of a broker-dealer or similar organization for at least 18 months. Separately, the SEC filed an administrative complaint against Eugene Terracciano, Aegis’s AML CO from September 2013 through approximately September 2015. Mr. Terracciano did not settle his SEC matter.

According to the SEC and FINRA, during the relevant time, Aegis failed to file SARs “on hundreds of transactions” it should have suspected constituted fraudulent activity or had no legitimate business purpose. These transactions involved the purchases and sales of low-priced securities by customers that evidenced red flags of market manipulation, including sudden high trading volumes of stocks of companies during periods of low business activity, increasing stock prices not supported by the companies' financial performance, and promotional campaigns. The regulators claimed that Aegis’s daily review process did not identify the relevant transactions as suspicious, nor did the firm adequately follow up on alerts provided by the firm’s clearing broker or on inquiries by regulators. These alerts, noted the SEC, were received by Aegis’s then AML CO. Additionally, said the SEC, Aegis did not adequately train its employees regarding AML issues associated with low-priced securities transactions.

Among other things, the SEC said that the failure of the AML COs to double check why the firm’s daily review process did not identify potentially problematic transactions, as well as their failure to file SARS or create written analyses indicating that they even considered filing SARs after red flags of suspicious conduct were expressly brought to their attention, evidenced their willful aiding and abetting of Aegis’s violations. Mr. Eide was charged with causing the violations directly.

The SEC seeks civil penalties and other “appropriate” remedial action against Mr. Terracciano.

Compliance Weeds 1: Applicable law and FinCEN rules require broker-dealers and other covered financial institutions (banking institutions, Commodity Futures Trading Commission-registered futures commission merchants and introducing brokers and SEC-registered mutual funds) to file a SAR with FinCEN in response to transactions of at least US $5,000 which a covered entity “knows, suspects, or has reason to suspect” involve funds derived from illegal activity; have no business or apparent lawful purpose; are designed to evade applicable law; or utilize the institution for criminal activity.

Covered financial institutions should continually monitor transactions they facilitate; ensure they maintain and follow written procedures to identify and evaluate red flags of suspicious activities; and file SARs with FinCEN when appropriate. (Click here for a helpful overview of anti-money laundering requirements for broker-dealers, including SAR requirements. Click here for a similarly helpful compilation of AML resources for members of the National Futures Association.)

Moreover, covered institutions should ensure that problematic transactions identified by non-AML personnel (e.g., compliance staff) that may violate legal or regulatory standards are evaluated by AML personnel to determine whether a SAR should be filed with FinCEN. Indeed, the more consolidated a ledger a firm can maintain of potential problems identified across otherwise separate surveillance functions, the more likely a firm will be able to recognize and act holistically upon material red flags.

Compliance Weeds 2: Beginning May 11, covered financial institutions must begin to identify the beneficial owners of their legal entity customers for new accounts. Currently such entities are mandatorily required to know the identity of each of their legal entity customers, but not necessarily their beneficial owners.

By May 11, covered institutions must establish and maintain written procedures reasonably designed to identify and verify the identities of beneficial owners of legal entity customers unless such customers are expressly excluded (e.g., certain US or non-US regulated financial entities).

Beneficial owners include each real person who directly or indirectly has a 25 percent or more equity ownership interest in the legal entity customer, and a single individual with “significant responsibility to control, manage, or direct a legal entity customer, including an executive officer or senior manager or any other individual who regularly performs similar functions.” Legal entity customers include corporations, limited liability companies, partnerships and other similar business entities.

A covered financial institution must evidence its compliance with FinCEN’s new requirements by obtaining a mandatory certification form from a legal entity customer that identifies its beneficial owners or by receiving the information required by the form (i.e., for each beneficial owner, name, date of birth, address, and social security number, or for non-US persons, passport number) by another means with an appropriate certification. A covered firm must also verify the identity of each enumerated beneficial owners according to risk-based procedures that contain the elements required for verifying the identity of individuals under FinCEN’s existing relevant rules through documents or non-documentary methods (i.e., Customer Identification Program requirements). However, a covered firm may use photocopies or reproductions of original documents in connection with such verification.

Under FinCEN’s new rules, one covered institution may delegate its responsibilities to another covered firm, but only pursuant to a written contract that includes certain enumerated obligations.

Likely, bigger covered financial institutions are in the process now of finalizing their written procedures and processes to ensure compliance with FinCEN’s new requirements. However, smaller firms should also ensure they are ready for their new obligations.

(Click here for further background in the article “FINRA Provides AML Guidance to Members” in the December 3, 2017 edition of Bridging the Week.)

Pump and Dump Fraud Results in SEC Charges Against Broker-Dealer and Salesperson: Wedbush Securities Inc., a broker-dealer, and Timary Delorme, a registered representative with the firm since 1981, were named in separate administrative proceedings initiated by the Securities and Exchange Commission for their role in an alleged pump and dump scheme aimed at retail investors from 2008 to 2014. Simultaneously, Ms. Delorme settled her SEC action by agreeing to pay a fine of US $50,000 and to never associate with a broker-dealer, among other sanctions.

According to the SEC, Ms. Delorme benefited from investing her customers in microcap securities that were subject to a pump and dump scheme by Izak Zirk Engelbrecht (a/k/a Zirk de Maison) – who last year was sentenced to 12 years’ imprisonment for his role in the fraud that resulted in a US $39 million loss to customers. (Click here for a copy of the Department of Justice’s press release regarding Mr. Engelbrecht’s sentencing.) The SEC also previously brought charges against Mr. Engelbrecht and others related to the alleged manipulative scheme. (Click here for a copy of the SEC’s complaint.)

According to the SEC, in late 2012 and early 2013, Ms. Delorme’s supervisors became aware of numerous red flags regarding her conduct, including by reviewing email that purportedly outlined her role in fraudulent transactions involving penny stocks; receiving copies of two customer arbitrations with the Financial Industry Regulatory Authority filed by her customers that made “serious allegations” regarding her role in the same penny stock issuers; and becoming aware of FINRA’s investigations regarding her personal trading of one of the relevant penny stocks as well as of the allegations underlying the customer arbitrations. However, said the SEC, despite being aware of these red flags, Ms. Delorme’s supervisors continued to permit her to make investment recommendations to her customers.

The SEC charged that Wedbush failed to have adequate supervisory systems to guide supervisors and staff to detect the facilitation of market manipulation by registered representatives, such as Ms. Delorme, or to investigate and handle red flags. As a result, claimed the SEC, “[t]here was substantial confusion as to whose responsibility it [was] to conduct investigations related to red flags of potential market manipulation by [Ms.] Delorme.”

In explaining Ms. Delorme’s seemingly modest settlement amount, the SEC noted that Ms. Delorme had provided the SEC with a sworn statement of financial condition, asserting her inability to pay a civil penalty. The SEC said it took this statement into account in determining the US $50,000 penalty.

In 2014, Wedbush and two senior officers resolved an enforcement action by the SEC alleging violations of the Commission’s market access rule (Reg MAR; click here for background). Wedbush agreed to pay a fine of US $2.44 million, while the two individual officers agreed to pay a combined fine of US $85,000. Wedbush also agreed to retain a consultant to review its compliance with regulatory requirements related to its market access business, among other matters. (Click here for background in the article “Broker-Dealer and Two Senior Officers Fined US $2.5 Million for Market Access Violations” in the November 23, 2014 edition of Bridging the Week.) More recently, Wedbush agreed to pay a fine of US $1 million and US $250,000 in disgorgement to resolve SEC allegations that it violated the Commission’s customer protection rule (click here for background on this rule, and here regarding the SEC’s charges) between September 2014 and January 2015 and a fine of US $1.5 million to the Financial Industry Regulatory Authority related generally to the same offense. (Click here for background in the article “US Broker-Dealer Agrees to US $1.5 Million Fine to Resolve FINRA Charges Related to Capital and Customer Protection” in the February 11, 2016 edition of Bridging the Week.)

SEC Considers NYSE Bitcoin Futures ETFs: The Securities and Exchange Commission announced that it would formally consider whether to approve or disapprove rule changes to authorize NYSE Arca, Inc. to list and trade shares of exchange-traded funds based on bitcoin futures contracts traded on either the Cboe Futures Exchange or the Chicago Mercantile Exchange. The SEC solicited comments specifically regarding whether the relevant funds would have sufficient information to assess the fair value of the relevant bitcoin futures contracts, what might be the potential impact of manipulation in the underlying bitcoin markets on the funds’ net asset value; how the funds’ valuation policies might be impacted by bitcoin forks; and what might be the impact of the high margin requirements for bitcoin futures contracts on the liquidity of such markets and the ability of funds to meet redemption orders, among other topics.

All comments must be submitted within 21 days of the SEC’s announcement being published in the Federal Register; rebuttal comments must be submitted within 35 days of publication.

In January, the SEC’s Davison of Investment Management issued a letter to two industry organizations stating its belief that, as of now, it was not appropriate for investment fund sponsors to seek registration of SEC-regulated funds—such as mutual funds or exchange-traded funds—to “invest substantially in cryptocurrency and related products.” This is because “there are a number of significant protection issues that need to be examined before sponsors begin offering these funds to retail investors,” said the Division. At the time, the Division implied that, until its questions were answered “satisfactorily,” it was not likely to consider for approval any registered fund to invest in cryptocurrencies. (Click here for background in the article “SEC Not Feeling Groovy About Cryptocurrencies – Tells Registered Investment Funds: Slow Down, You Move Too Fast,” in the January 21, 2018 edition of Bridging the Week.)

Last week, in response to the Division’s January letter, Cboe submitted a letter to the SEC encouraging it to view virtual currency exchange-traded products “holistically and from the same perspective that it has historically approached commodity-related EPTs: where exposure to the underlying reference asset could reasonably be included in an investment portfolio, an ETP would provide a more transparent and easily accessible vehicle for gaining such exposure, and the market infrastructure for the underlying reference asset and its associated derivatives do not give rise to significant concerns in any of the … issues raised in the Staff Letter.” (Click here for a copy of Cboe’s letter.)

Unrelatedly:

·NFA Reminds Members to Update Questionnaires Regarding Virtual Currencies: The National Futures Association reminded introducing brokers, commodity pool operators and commodity trading advisors to update the firm-level section of their annual questionnaire if they become involved with virtual currency derivatives, and for CPOs and CTAs only, if they trade in virtual currencies of any type. (Click here to access a copy of the NFA notice and here for additional background in the article “NFA Virtual Currency Reporting Obligations” in the January 7, 2018 edition of Bridging the Week.)

·ESMA Restricts Cryptocurrency CFDs: The European Securities and Markets Authority will impose a temporary restriction on the marketing, distribution or sale of contract for differences to retail investors, including CFDs based on cryptocurrencies. Two months after formal adoption by ESMA through publication of a notice on its website, there will be a maximum leverage limit for CFDs based on cryptocurrencies of 2:1. This means that retail investors will have to post at least 50 percent of the notional value of such a CFD when entering into it. Thereafter, a position must be closed out if the retail client’s open CFD margin declines 50 percent or more of the minimum initial required margin. ESMA will also impose restrictions on binary options. (Click here for background.) The Financial Conduct Authority indicated it would consider making these temporary measures permanent in the United Kingdom (click here for background).

·Massachusetts Stops ICOs: Massachusetts has obtained consent orders against five state-located issuers of digital tokens involved in initial coin offerings, requiring them to cease and desist from offering unregistered securities, until such securities are registered or lawfully exempt from registration. Moreover, each issuer must offer rescission of sales to investors. The entities subject to the orders are: Across Platforms, Inc., 18moons, Inc., Mattervest, Inc., Pink Ribbon and Sparkco, Inc. (Click here to access all the consent orders.)

·Bitcoin Trader Convicted of Money Laundering: Thomas Costanzo was convicted of money laundering in a trial held in a federal court Arizona. Mr. Costanzo purportedly assisted undercover federal agents posing as drug dealers launder funds by accommodating their purchases and sales of bitcoin over a two-year period (click here for details).

Follow-Up: Oral arguments are scheduled for April 27 in a federal court in Brooklyn, New York, in connection with Maksim Zaslavskiy’s motion to dismiss his indictment charging that he engaged in illegal unregistered securities offerings and securities fraud in connection with the initial coin offerings of two digital tokens (REcoin and DRC) organized by two of his companies, REcoin Group Foundation, LLC and DRC World, Inc. (Click here for background on Mr. Zaslavskiy’s indictment in the article “Federal Court, Treasury and SEC Provide Further Guidance on Cryptocurrencies; Subject of Criminal Complaint for ICO Asks Court to Dismiss Prosecution Claiming Cryptocurrencies Are Not Securities” in the March 11, 2018 edition of Bridging the Week.) Last week, in supplemental papers submitted by his counsel, Mr. Zaslavskiy repeated earlier arguments that the digital tokens he issued were currencies and thus not securities under applicable law, and that, in any case, the digital tokens were not investment contracts, applying the Supreme Court’s multi-prong test in SEC v. W.J. Howey Co. (click here to access). The Department of Justice and the SEC rejected these views in papers filed earlier in March. (Click here for background in the article “Department of Justice Argues Against Motion to Dismiss Indictment of ICO Sponsor Claiming That Relevant Digital Tokens Are Securities” in the March 25, 2016 edition of Bridging the Week.) Mr. Zaslavskiy's counsel also argued last week that the Securities and Exchange Commission had not given adequate notice of its view that cryptocurrencies are securities, as purportedly required by applicable law. (Click here and here to obtain copies of Mr. Zaslavskiy’s latest submissions.)

More Briefly:

International Bank Agrees to Pay US $2 Billion to Resolve Federal Claims Related to Sales of Mortgage-Backed Securities: Barclays Capital, Inc. and several of its affiliates agreed to pay a fine of US $2 billion to resolve a civil action brought by the Department of Justice that, between December 1, 2005 and December 31, 2007, it engaged in a fraudulent scheme to sell 36 residential-mortgage-backed securities by not disclosing that mortgage loans backing the deals were less creditworthy than represented, As a result, DoJ had charged that investors sustained billions of dollars in losses when more than half of the underlying loans defaulted. Two former Barclays managing directors named in the initial lawsuit also settled by payment of a combined sum of US $2 million. The individuals are Paul Menefee and John Carroll. The original complaint was filed in a federal court in Brooklyn, New York.

Brokerage Company Settles NY Charges Related to Nondisclosure of Order Execution Practices: Bank of America Corporation and Merrill Lynch, Pierce, Fenner and Smith Incorporated settled charges brought by the New York State Attorney General that the firms (collectively, “BofAML”) fraudulently misled customers regarding their electronic trading services. Specifically, the NYAG claimed that, beginning March 2018, BofAML entered into arrangements with electronic liquidity providers to execute a portion of its institutional clients’ orders. However, charged the NYAG, BofAML failed to disclose this arrangement to its clients, and instead advised them their orders were executed in-house. Moreover, said the NYAG, BofAML amended post-trade messaging to disguise the nature of executions to their clients, and on occasion, BofAML failed to disclose this execution arrangement when expressly asked by their clients about how orders would be routed. BofAML agreed to pay a fine of US $42 million to resolve this matter.

Letter to Editor:

Is a Hess Toy Truck a Security Too?: Referencing My View in the article “Department of Justice Argues Against Motion to Dismiss Indictment of ICO Sponsor Claiming That Relevant Digital Tokens Are Securities” in the March 26 edition of Bridging the Week (click here to access), I agree when you say that the “reasonable expectations of profits at the expense of others” is potentially not present in the SEC’s application of the Howey test to many ICO-issued securities. It seems to me that underlying the SEC’s assertion of jurisdiction is that this is something where there is a lot of volatility, thus a lot of chance that people could lose (or make) a lot of money, so the SEC cannot be seen not to act. Practical perhaps, but not principled.

Permit me to provide an analogy. Your readers (and their children) may be familiar with Hess toy trucks. I was a lawyer at Hess back in the ’90s. At that time, the trucks were made available for purchase at Hess gas stations between Thanksgiving and Christmas. They may have been available “with purchase” so there was a tie-in to Hess’s core business. I think most trucks were bought by people to put under their Christmas tree. But some people bought them as collectors’ items, in many cases with the hope that they would appreciate over time, especially if they were left unopened. A secondary market has existed, mostly on eBay in recent years.

Hess exited the retail gas business about five years ago, when they sold that business to Speedway. They have, however, continued to produce Hess toy trucks. They are made available for purchase online at a fixed price between Thanksgiving and Christmas (or until supplies last). The money goes to the Hess company to do with it whatever they want in their operations. No one expects Hess to take the proceeds of the sale and work solely to enhance the value of the trucks; they will use the proceeds to increase the value of the company. In theory, that might raise the value of the trucks on secondary markets, but that is pretty attenuated. Practically, this is no different from what I understand many sponsors of ICOs are doing. They are not promising any direct income to purchasers of digital tokens; they solely will be using proceeds of the ICO to increase the value of their project. Similar to the Hess truck, that might indirectly raise the value of the associated digital tokens on a secondary market, but that is pretty attenuated.

As My View noted, the SEC’s assertion would “make so many unlikely things securities.” If there is an assertion that the thing offered in the ICO (the token) is considered to be a security, why wouldn't one make the same assertion about the Hess toy truck?

Robert Pickel(Former chief executive officer, International Swaps and Derivatives Association, and currently an advisor, writer and expert witness in financial industry matters)

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

Katten Muchin Rosenman LLP on:

"My best business intelligence, in one easy email…"

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.

- hide

JD Supra Privacy Policy

Updated: May 25, 2018:

JD Supra is a legal publishing service that connects experts and their content with broader audiences of professionals, journalists and associations.

This Privacy Policy describes how JD Supra, LLC ("JD Supra" or "we," "us," or "our") collects, uses and shares personal data collected from visitors to our website (located at www.jdsupra.com) (our "Website") who view only publicly-available content as well as subscribers to our services (such as our email digests or author tools)(our "Services"). By using our Website and registering for one of our Services, you are agreeing to the terms of this Privacy Policy.

Please note that if you subscribe to one of our Services, you can make choices about how we collect, use and share your information through our Privacy Center under the "My Account" dashboard (available if you are logged into your JD Supra account).

Collection of Information

Registration Information. When you register with JD Supra for our Website and Services, either as an author or as a subscriber, you will be asked to provide identifying information to create your JD Supra account ("Registration Data"), such as your:

Email

First Name

Last Name

Company Name

Company Industry

Title

Country

Other Information: We also collect other information you may voluntarily provide. This may include content you provide for publication. We may also receive your communications with others through our Website and Services (such as contacting an author through our Website) or communications directly with us (such as through email, feedback or other forms or social media). If you are a subscribed user, we will also collect your user preferences, such as the types of articles you would like to read.

Information from third parties (such as, from your employer or LinkedIn): We may also receive information about you from third party sources. For example, your employer may provide your information to us, such as in connection with an article submitted by your employer for publication. If you choose to use LinkedIn to subscribe to our Website and Services, we also collect information related to your LinkedIn account and profile.

Your interactions with our Website and Services: As is true of most websites, we gather certain information automatically. This information includes IP addresses, browser type, Internet service provider (ISP), referring/exit pages, operating system, date/time stamp and clickstream data. We use this information to analyze trends, to administer the Website and our Services, to improve the content and performance of our Website and Services, and to track users' movements around the site. We may also link this automatically-collected data to personal information, for example, to inform authors about who has read their articles. Some of this data is collected through information sent by your web browser. We also use cookies and other tracking technologies to collect this information. To learn more about cookies and other tracking technologies that JD Supra may use on our Website and Services please see our "Cookies Guide" page.

How do we use this information?

We use the information and data we collect principally in order to provide our Website and Services. More specifically, we may use your personal information to:

Operate our Website and Services and publish content;

Distribute content to you in accordance with your preferences as well as to provide other notifications to you (for example, updates about our policies and terms);

Measure readership and usage of the Website and Services;

Communicate with you regarding your questions and requests;

Authenticate users and to provide for the safety and security of our Website and Services;

Conduct research and similar activities to improve our Website and Services; and

Comply with our legal and regulatory responsibilities and to enforce our rights.

How is your information shared?

Content and other public information (such as an author profile) is shared on our Website and Services, including via email digests and social media feeds, and is accessible to the general public.

If you choose to use our Website and Services to communicate directly with a company or individual, such communication may be shared accordingly.

Readership information is provided to publishing law firms and authors of content to give them insight into their readership and to help them to improve their content.

Our Website may offer you the opportunity to share information through our Website, such as through Facebook's "Like" or Twitter's "Tweet" button. We offer this functionality to help generate interest in our Website and content and to permit you to recommend content to your contacts. You should be aware that sharing through such functionality may result in information being collected by the applicable social media network and possibly being made publicly available (for example, through a search engine). Any such information collection would be subject to such third party social media network's privacy policy.

Your information may also be shared to parties who support our business, such as professional advisors as well as web-hosting providers, analytics providers and other information technology providers.

Any court, governmental authority, law enforcement agency or other third party where we believe disclosure is necessary to comply with a legal or regulatory obligation, or otherwise to protect our rights, the rights of any third party or individuals' personal safety, or to detect, prevent, or otherwise address fraud, security or safety issues.

To our affiliated entities and in connection with the sale, assignment or other transfer of our company or our business.

How We Protect Your Information

JD Supra takes reasonable and appropriate precautions to insure that user information is protected from loss, misuse and unauthorized access, disclosure, alteration and destruction. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. You should keep in mind that no Internet transmission is ever 100% secure or error-free. Where you use log-in credentials (usernames, passwords) on our Website, please remember that it is your responsibility to safeguard them. If you believe that your log-in credentials have been compromised, please contact us at privacy@jdsupra.com.

Children's Information

Our Website and Services are not directed at children under the age of 16 and we do not knowingly collect personal information from children under the age of 16 through our Website and/or Services. If you have reason to believe that a child under the age of 16 has provided personal information to us, please contact us, and we will endeavor to delete that information from our databases.

Links to Other Websites

Our Website and Services may contain links to other websites. The operators of such other websites may collect information about you, including through cookies or other technologies. If you are using our Website or Services and click a link to another site, you will leave our Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We are not responsible for the data collection and use practices of such other sites. This Policy applies solely to the information collected in connection with your use of our Website and Services and does not apply to any practices conducted offline or in connection with any other websites.

Information for EU and Swiss Residents

JD Supra's principal place of business is in the United States. By subscribing to our website, you expressly consent to your information being processed in the United States.

Our Legal Basis for Processing: Generally, we rely on our legitimate interests in order to process your personal information. For example, we rely on this legal ground if we use your personal information to manage your Registration Data and administer our relationship with you; to deliver our Website and Services; understand and improve our Website and Services; report reader analytics to our authors; to personalize your experience on our Website and Services; and where necessary to protect or defend our or another's rights or property, or to detect, prevent, or otherwise address fraud, security, safety or privacy issues. Please see Article 6(1)(f) of the E.U. General Data Protection Regulation ("GDPR") In addition, there may be other situations where other grounds for processing may exist, such as where processing is a result of legal requirements (GDPR Article 6(1)(c)) or for reasons of public interest (GDPR Article 6(1)(e)). Please see the "Your Rights" section of this Privacy Policy immediately below for more information about how you may request that we limit or refrain from processing your personal information.

Your Rights

Right of Access/Portability: You can ask to review details about the information we hold about you and how that information has been used and disclosed. Note that we may request to verify your identification before fulfilling your request. You can also request that your personal information is provided to you in a commonly used electronic format so that you can share it with other organizations.

Right to Correct Information: You may ask that we make corrections to any information we hold, if you believe such correction to be necessary.

Right to Restrict Our Processing or Erasure of Information: You also have the right in certain circumstances to ask us to restrict processing of your personal information or to erase your personal information. Where you have consented to our use of your personal information, you can withdraw your consent at any time.

You can make a request to exercise any of these rights by emailing us at privacy@jdsupra.com or by writing to us at:

You can also manage your profile and subscriptions through our Privacy Center under the "My Account" dashboard.

We will make all practical efforts to respect your wishes. There may be times, however, where we are not able to fulfill your request, for example, if applicable law prohibits our compliance. Please note that JD Supra does not use "automatic decision making" or "profiling" as those terms are defined in the GDPR.

Timeframe for retaining your personal information: We will retain your personal information in a form that identifies you only for as long as it serves the purpose(s) for which it was initially collected as stated in this Privacy Policy, or subsequently authorized. We may continue processing your personal information for longer periods, but only for the time and to the extent such processing reasonably serves the purposes of archiving in the public interest, journalism, literature and art, scientific or historical research and statistical analysis, and subject to the protection of this Privacy Policy. For example, if you are an author, your personal information may continue to be published in connection with your article indefinitely. When we have no ongoing legitimate business need to process your personal information, we will either delete or anonymize it, or, if this is not possible (for example, because your personal information has been stored in backup archives), then we will securely store your personal information and isolate it from any further processing until deletion is possible.

Onward Transfer to Third Parties: As noted in the "How We Share Your Data" Section above, JD Supra may share your information with third parties. When JD Supra discloses your personal information to third parties, we have ensured that such third parties have either certified under the EU-U.S. or Swiss Privacy Shield Framework and will process all personal data received from EU member states/Switzerland in reliance on the applicable Privacy Shield Framework or that they have been subjected to strict contractual provisions in their contract with us to guarantee an adequate level of data protection for your data.

California Privacy Rights

Pursuant to Section 1798.83 of the California Civil Code, our customers who are California residents have the right to request certain information regarding our disclosure of personal information to third parties for their direct marketing purposes.

You can make a request for this information by emailing us at privacy@jdsupra.com or by writing to us at:

Some browsers have incorporated a Do Not Track (DNT) feature. These features, when turned on, send a signal that you prefer that the website you are visiting not collect and use data regarding your online searching and browsing activities. As there is not yet a common understanding on how to interpret the DNT signal, we currently do not respond to DNT signals on our site.

Access/Correct/Update/Delete Personal Information

For non-EU/Swiss residents, if you would like to know what personal information we have about you, you can send an e-mail to privacy@jdsupra.com. We will be in contact with you (by mail or otherwise) to verify your identity and provide you the information you request. We will respond within 30 days to your request for access to your personal information. In some cases, we may not be able to remove your personal information, in which case we will let you know if we are unable to do so and why. If you would like to correct or update your personal information, you can manage your profile and subscriptions through our Privacy Center under the "My Account" dashboard. If you would like to delete your account or remove your information from our Website and Services, send an e-mail to privacy@jdsupra.com.

Changes in Our Privacy Policy

We reserve the right to change this Privacy Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our Privacy Policy will become effective upon posting of the revised policy on the Website. By continuing to use our Website and Services following such changes, you will be deemed to have agreed to such changes.

Contacting JD Supra

If you have any questions about this Privacy Policy, the practices of this site, your dealings with our Website or Services, or if you would like to change any of the information you have provided to us, please contact us at: privacy@jdsupra.com.

JD Supra Cookie Guide

As with many websites, JD Supra's website (located at www.jdsupra.com) (our "Website") and our services (such as our email article digests)(our "Services") use a standard technology called a "cookie" and other similar technologies (such as, pixels and web beacons), which are small data files that are transferred to your computer when you use our Website and Services. These technologies automatically identify your browser whenever you interact with our Website and Services.

How We Use Cookies and Other Tracking Technologies

We use cookies and other tracking technologies to:

Improve the user experience on our Website and Services;

Store the authorization token that users receive when they login to the private areas of our Website. This token is specific to a user's login session and requires a valid username and password to obtain. It is required to access the user's profile information, subscriptions, and analytics;

Track anonymous site usage; and

Permit connectivity with social media networks to permit content sharing.

There are different types of cookies and other technologies used our Website, notably:

"Session cookies" - These cookies only last as long as your online session, and disappear from your computer or device when you close your browser (like Internet Explorer, Google Chrome or Safari).

"Persistent cookies" - These cookies stay on your computer or device after your browser has been closed and last for a time specified in the cookie. We use persistent cookies when we need to know who you are for more than one browsing session. For example, we use them to remember your preferences for the next time you visit.

"Web Beacons/Pixels" - Some of our web pages and emails may also contain small electronic images known as web beacons, clear GIFs or single-pixel GIFs. These images are placed on a web page or email and typically work in conjunction with cookies to collect data. We use these images to identify our users and user behavior, such as counting the number of users who have visited a web page or acted upon one of our email digests.

JD Supra Cookies. We place our own cookies on your computer to track certain information about you while you are using our Website and Services. For example, we place a session cookie on your computer each time you visit our Website. We use these cookies to allow you to log-in to your subscriber account. In addition, through these cookies we are able to collect information about how you use the Website, including what browser you may be using, your IP address, and the URL address you came from upon visiting our Website and the URL you next visit (even if those URLs are not on our Website). We also utilize email web beacons to monitor whether our emails are being delivered and read. We also use these tools to help deliver reader analytics to our authors to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

Analytics/Performance Cookies. JD Supra also uses the following analytic tools to help us analyze the performance of our Website and Services as well as how visitors use our Website and Services:

Google Analytics - For more information on Google Analytics cookies, visit www.google.com/policies. To opt-out of being tracked by Google Analytics across all websites visit http://tools.google.com/dlpage/gaoptout. This will allow you to download and install a Google Analytics cookie-free web browser.

Facebook, Twitter and other Social Network Cookies. Our content pages allow you to share content appearing on our Website and Services to your social media accounts through the "Like," "Tweet," or similar buttons displayed on such pages. To accomplish this Service, we embed code that such third party social networks provide and that we do not control. These buttons know that you are logged in to your social network account and therefore such social networks could also know that you are viewing the JD Supra Website.

Controlling and Deleting Cookies

If you would like to change how a browser uses cookies, including blocking or deleting cookies from the JD Supra Website and Services you can do so by changing the settings in your web browser. To control cookies, most browsers allow you to either accept or reject all cookies, only accept certain types of cookies, or prompt you every time a site wishes to save a cookie. It's also easy to delete cookies that are already saved on your device by a browser.

The processes for controlling and deleting cookies vary depending on which browser you use. To find out how to do so with a particular browser, you can use your browser's "Help" function or alternatively, you can visit http://www.aboutcookies.org which explains, step-by-step, how to control and delete cookies in most browsers.

Updates to This Policy

We may update this cookie policy and our Privacy Policy from time-to-time, particularly as technology changes. You can always check this page for the latest version. We may also notify you of changes to our privacy policy by email.

Contacting JD Supra

If you have any questions about how we use cookies and other tracking technologies, please contact us at: privacy@jdsupra.com.

- hide

This website uses cookies to improve user experience, track anonymous site usage, store authorization tokens and permit sharing on social media networks. By continuing to browse this website you accept the use of cookies. Click here to read more about how we use cookies.